As Joe Uva marked his three-year anniversary as CEO of Univision Communications, he spoke with B&C Business Editor Claire Atkinson about how his "partnership" with cable operators on retransmission is becoming a "catalyst" to drive pay-TV and broadband adoption among Hispanics. He also explained how he's restructuring the company to make it more "self-reliant" before its contract with telenovela giant Televisa expires in 2017.
Uva, who was inducted into the B&C Hall of Fame in 2007, runs a portfolio of Spanish- language assets that includes broadcast networks Univision and TeleFutura and cable network Galavisión. The company also owns a station group, a radio group and an Interactive Media division. Univision will present to advertisers on May 20, during broadcast upfront week; Uva says the company will showcase big changes at 10 p.m. and pitch the company as a conduit to Hispanic consumers, who Uva says possess $1 trillion in purchasing power. An edited transcript of the interview follows.
Univision was one of the first companies to talk to distributors about getting paid cash for retransmission consent. How is that going?
We were very successful in 2009. In our first foray into retransmission consent with distributors, we were focused on making sure we deliver the value to help distributors to grow their business and relationships with the Hispanic community.
It was a catalyst for pay TV to establish a relationship with Hispanics and, as we've seen over the past seven to eight months, has led to a higher adoption rate and use of broadband through relationships with cable operators. It had been a largely untapped consumer prior to the digital [switchover]. Hispanic TV was received free-to-air, not through a pay-TV provider.
Our approach had been in partnership with the distributors, not in an adversarial position but demonstrating value by helping them to keep growing, listening to them on providing new VOD offerings, or potentially new networks on any platform.
How will retransmission fees grow in the next few years?
We have added substantially to our revenue and EBITDA growth in 2009. The [retrans] number is projected to double over the next three to five years.
What are the other growth opportunities for Univision beyond new retransmission fees?
Univision is looking at new networks. We're assessing growth opportunities all the time.
Are you planning to launch a new cable channel?
No. There is nothing formulated. We know there's an opportunity as interests evolve to expand our offerings to the community. It may, or may not, take the form of traditional cable nets. I believe there are opportunities to expand our connections on the video platform. Mobile is a very fast-growing sector and very important platform for Univision. We have applications and we have deals for apps for the iPhone, the Black- Berry and the Droid.
In March, you made some executive changes in entertainment and news. What was your aim?
Entertainment is a major part of what drives this organization, and we announced in the fourth quarter the formation of Univision Studios, which is designed to enhance our ability to produce more original content. Today we produce 4,000 hours of content per year; in order to stay current and ahead of tastes and interests and to remain relevant, we need to expand our capabilities.
News is vitally important to what we do; putting [now President of News] Alina Falcon in charge of news across platforms will allow us to provide greater consistency and quality. We've always been committed to news. It is the connective tissue to the community.
Are these changes in anticipation of Televisa not renewing your programming contract beyond 2017?
We need to be more self-reliant. Look at our Univision Studios announcement and the reorganization as being necessary for us to continue to evolve with the tastes and interests of the audience.
Today, while our classic telenovela is the heart and soul of primetime and we expect it to be for many more years, we are also aware of the fact that there are new genres of dramatic programming coming out of Mexico and Latin American countries-from Argentina and Venezuela-that have attracted audiences. In order to continue to serve our audience, we need to be finding ways to incorporate that content into our programming schedule.
In addition to Televisa, the most important partnership, we have equally long relationships with Venevision and RCN in Colombia. Univision, TeleFutura and Galavisión have relationships with Endemol and relationships with Caracol in Colombia, and we have relationships online for novela content with Dori Media in Israel.
What are you going to say at the Univision upfront presentation this year?
Cesar Conde began as the new president, we have made changes in entertainment and news, we launched a studio, and this year, while we will certainly speak to our unique value for marketers, we'll be showcasing new programming for the 10 p.m. broadcast. We will be looking at Univision, TeleFutura and Galavisión, and how video content offerings will be also extended to online and mobile platforms.
How will the census change the game for you?
It is going to be eye-opening because the expectation is that it may show Hispanic population in the U.S. will be around 50 million. That's about 15% or 16% of the U.S. population in total. At only 15% to 16% of the U.S. population, the U.S. Hispanic represents $1 trillion of purchasing power. That number is expected to double in terms of purchasing power in the next seven years. [Hispanic purchasing- power figures come from the latest Global Insight data, provided by Univision.-Ed.]
How is Univision going to show growth in 2010?
We're continuing to do what we've been doing, continuing to drive the opportunity that the Hispanic audience represents. We've positioned ourselves as being able to provide not only access, but the connections necessary to win those consumers over. We really are working with advertisers to help them understand that while we're a media company, we represent a gateway and conduit to the Hispanic community. The relationship that we've built over 40 years continues to grow.
Tell us more about the growth in your offerings at Univision.com.
We have established value to advertisers in video platforms, and that's rapidly expanded over past nine months. On April 10, we're launching the new novela channel. We're constantly adding more video and as you know, the expansion of that audience is a terrific ad opportunity to have a more intimate connection with the audience.
How did you do in last year's upfront?
Despite the economy, we were very successful in the 2009 upfront with consumer packaged goods, quick-service restaurants and pharmaceutical, and some entertainment companies. At a time when spending was flat or down, their investment grew. It came from a share shift away from English-language networks to Univision. That's in part a recognition of their larger households and the greater presence of children under 18. They shop more often.
What are the challenges of selling the Hispanic audience to advertisers?
There is still some stereotypical thinking. They think of Hispanics as unskilled labor, or people confined to service and agricultural industries. In reality, they represent in every group from law enforcement to health care, education and entertainment, and other sectors.
Is Nielsen keeping up with all the changes occurring in the Hispanic marketplace?
They continue to make improvements. Nielsen has done a good job and continues to improve.
What is the difference between a Hispanic consumer and a general-market consumer?
Cultural differences as well as different languages. There are some immutable truths that cross the culture. One is that Hispanics are aspirational; they really value family and rely on word-of-mouth references, especially those of family and friends.
One category illustration: When a non-Hispanic is making a purchase decision for a car, many consumers will research it online and will have a fairly good idea of what they want when they walk into the dealership, and they may want to negotiate price. But it's usually the head of household, one parent who's going with the child to the dealership. For Hispanics, it's a family affair. They want to ask a lot of questions and see the variety, and touch and sit in the car. It's a celebration; it's a different experience.
You say that Univision is much more than just a media company, that it is there to serve the community in many more ways. Can you share some of those educational initiatives?
Looking back, the company always had a strong commitment to Hispanics and helping them to better their lives. We'll continue to have a laser-like focus on topics that accomplish that. It ranges from helping people on the path to citizenship and what it means to be civically engaged, to health and wellness. We also announced a multimedia national campaign fostering a college-bound community; it's called "Es El Momento." It began in February and has the support of the U.S. Department of Education and the Bill and Melinda Gates Foundation.
We understand the importance of engaging the community and in the socio-political discussion that takes place. Look at what we've done. In fall 2007, we launched Al Punto, a political show. The primary debates, with the leading Democratic and Republican primary candidates, were a catalyst in helping to register more Hispanic voters and have them turn out at the polls; that trend will continue and grow with the census.
You are an Italian-American. Did you have an a-ha! moment about this culture as you've learned about it?
The [situations of] Italian immigrants in the 19th and 20th centuries, and the Hispanic experience today, are culturally similar. The fact is we want to stay connected; we have similar passion points around food and entertainment and music. [Hispanics are] really very aspirational and committed to having successive generations constantly improve. The thing that amazes me is that since I've been in this role, there's an ever-increasing potential for marketers to grow rapidly by their investment in the Hispanic consumer.
What's always amazed me is the people who immigrate to this country; the ones looking for the American dream, Latins in particular. They represent a land of opportunity; they struggled to get here, they're the hardest-working people and make the most sacrifices. To stereotype them as people not committed to advancing is really woefully misguided and uninformed. They've dealt with challenges most of us never had to deal with, and are every bit as American as any of us who were born here.
Your third anniversary as CEO came on March 31. What is your greatest achievement so far?
I think we've been able to help open marketers' eyes to the opportunity before them. We've been able to represent and expand our commitment to fulfilling our obligations to help further empower and educate Hispanic America during the most difficult advertising environment in memory. And to have demonstrated growth at a time when others have shrunk and struggled.
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